Alexander Mosesov, Associate Professor, Skyline College Sharjah, UAE

Nizar Mousa Farih Sahawneh, Lecturer, Skyline College Sharjah, UAE

Within last three decades both financial sector and UAE economy as a whole experienced a remarkable growth. Based on extended (1973-2003) time series data, this research attempts to find the relationship between financial and economic development of the UAE. For this purpose first, we check and try to match the trends in major indicators of national economy and its financial sector. Second, we use conventional model with amended inputs to investigate possible relationship. According to the results, although estimated regressions confirm importance of the traditional growth factors (labor, capital), they show no positive and/or significant relationship between the financial variables and the GDP. In addition, significant evidence is obtained on still heavy dependence of the UAE economy on oil prices. Oil price factor, as well as still ongoing process of the financial sector expansion (recent introduction of securities market) are apparent reasons that preclude obtaining clear evidence of the UAE financial sector impact on national economic development.

Mosesov, A., & Sahawneh, N. M. F. (2005). UAE: Financial Development and Economic Growth. Skyline Business Journal, Volume 1, No. 2, pp 1-5.